Hankyoreh, South Korea

Screen quota reduction to begin July 1

Part of free trade talks with U.S., move brings ire from local film industry

Starting July 1, South Korea will reduce the quota for the number of days domestic movies must be screened in local theaters. The move follows a requirement from Washington that the quota be reduced in order to begin free trade negotiations with Seoul.

Little immediate impact on the local film market is expected, but some adverse effects would be felt across the sector in the next several years, industry watchers said.

Screen quota

So far, Korean movies have had to play on local screens for a total of 146 days, or two-fifths of a year. But starting in July, the number will be reduced to 73, which will bring down the total screening days for this year to 109.

At a time when Korean movies account for more than 40 percent of box office reciepts, there has been no case in the past three years in which a local theater could not abide by the screen quota obligation.

Impact on movie industry

According to a recent survey conducted by the Korean Film Council, a majority of those polled said that the impact from the reduction in the screen quota would be felt in two-and-a-half years and the impact would be "negative."

In the first five months of this year, market share of Korean movies stood at 60 percent, higher than the 50 percent posted in the same period a year earlier. However, the number of Korean movies produced during the stated period jumped to 41 from 29. Many of those movies failed to break even, according to sources, though it was unclear whether the presence of U.S. blockbuster competition or the quality of the movies was behind their failure.

However, with Hollywood’s blockbuster movie producers poised to step up the marketing blitz here in South Korea, local producers are expected to follow suit.

A rise in production costs, coupled with sluggish investment, would inevitably lead to a deterioration in the local movie industry, sources say. There have been recent cases in which funding was pulled out in the middle of filming in order to minimize ballooning losses, an industry expert said, citing a change in the market taking place.

"I feel like market conditions are undergoing a change. Even if the conditions [are not going to be terrible], I feel it coming soon," said Kang Woo-seok, a move director. "It would be impossible for South Korean movies to compete with Hollywood blockbusters, as they are made with just a tenth of production costs. I feel frustrated that the government would attempt to reduce the quota simply based on a short-term rise in the market share of local movies."

Back to the old screen quota?

The reduction in the screen quota resulted from the negotiations which started late last year on a free trade agreement between Seoul and Washington. South Korea agreed upon the reduction in order to open the talks, prompting rallies by civic groups, actors, directors, and others in the industry.

However, the government remains adamant on the issue. "When we announced the reduction in January, we took into consideration not just bilateral free trade talks with the U.S. but also those with other countries, including multilateral talks down the road," a government official said.

"Even if the ongoing talks with the U.S. do not go through, the chances that the screen quota returns to where it was would be very slim because the negotiation itself is likely to continue," he added.